Kuda, a Nigeria-focused neobank banked by Target Global, has tripled its revenue in 2022, reaching $22 million, up from $7.7 million in the previous year, as customer numbers soared from 2.4 million to 4.9 million.
The company has been expanding its offerings over the past two years, including international remittances, and is moving into new markets like the U.K., Canada, Ghana, Tanzania, and Uganda. Kuda expected to double its revenue and user numbers by the end of 2023, having already reached 7 million users in January.
Despite the positive growth in users and revenue, Kuda’s net losses have also increased, reaching $32 million in 2022, more than doubling from the previous year. The company’s accumulated losses now stand at $55 million since its launch in 2019.
Kuda’s higher operating expenses and staffing costs, along with significant spending on marketing campaigns, including a World Cup advertisement, have contributed to these losses.
In an effort to diversify its revenue streams, Kuda earned $3.5 million from treasury investments in Nigeria in 2022, representing a third of its interest income. The company spent $42 million on new treasury investments by the end of the year, taking advantage of rising interest rates by the CBN to control inflation.
Kuda’s financial resources remain under pressure, with its cash reserves declining nearly 50% to $33 million at the start of the year. Although the company attempted to raise $20 million in bridge funding in mid-2023, it later abandoned these efforts.
Nevertheless, Kuda’s CFO, Frederic Bidet, insists the company has sufficient funds to reach breakeven and does not currently need to fundraise to meet operating expenses.
